Investing.com - The Federal Reserve held its fire on Wednesday, but sent a strong signal that an interest rate hike is likely this year, putting the focus on hawkish dissents in the latest statements that could sugegst a move just ahead of the presidential election.
The FOMC statement was upbeat about the economy, noting that improvement in the labor market though inflation remaining low. The key sentence was the FOMC's assessment that risks to the economic outlook were "roughly balanced," a near repeat of the "nearly balanced" phrase that preceded December's rate hike.
But some analysts homed in on the sentence: "The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives."
That statement, according to one bank, may mean the hawks are in the driver's seat.
"A case could be made that this points to November, though we still think the odds for a hike at that meeting remain well below 50%," J.P. Morgan economist Michael Feroli said in a note to clients.
Investing.com's Fed Rate Monitor Tool sees market sentiment at a 14.5% chance for a rate hike next month.